Turton in the news
Before office building 2830 G St. in Midtown Sacramento closed escrow this month, it had to overcome a whole lot of hurdles.
Broker John Mudgett of Turton Commercial Real Estate can tick them off: a lockdown stemming from the Covid-19 pandemic, a stock market crash for the same reason, then an eviction moratorium on commercial tenants and a request for a price reduction and more from the eventual buyer. Mudgett and Patrick Stelmach of Turton Commercial worked on behalf of the buyer. Randy Brekke of Brekke Commercial Real Estate represented the seller.
Even in a good market, condos have a reputation as a risky asset to develop. They generally rely on 1) fairly well-heeled buyers who 2) have specific reasons for not wanting a single-family home and 3) also won’t race to an attorney’s office if a construction defect pops up.
But within the last few weeks, another indicator: The “Penthomes” at infill project Mill at Broadway are likely to become rental apartments instead. Scott Kingston of Turton Commercial Real Estate, which has the listing, said that though the 12 units in two buildings are being sold empty, it’s more likely an investor would buy them to rent than to buy.
Most of the housing in the urban infill project Mill at Broadway has been for ownership, but the developers appear to be pivoting.
Turton Commercial Real Estate is marketing two recently completed condominium buildings called “Penthomes” within the Sacramento project south of Broadway for sale. Company officials, however, expect the primary investor interest will see them as rental properties instead.
A property with development potential in a growing part of West Sacramento is on the market. Scott Kingston, Ken Turton and Patrick Stelmach of Turton Commercial Real Estate listed the property at 316-330 Third St. last week for $3.75 million. The property includes mixed-used, multifamily and single residences on 1.026 acres. It is the site of a recently restored adaptive reuse commercial and residential building that that has tenants including Edible Pedal Bike Shop, Devil May Care Ice Cream & Frozen Treats and La Crosta Pizza Bar. The building has two apartments above it, and the site also includes four single-family houses. There is also 16,500 square feet of vacant land behind the commercial building.
A restaurant space in the heart of Downtown Sacramento’s K Street is for lease. The 7,739-square-foot space is being leased by Scott Kingston and Patrick Stelmach of Turton Commercial Real Estate. Even though restaurants are currently closed for inside dining due to the Covid-19 pandemic, Kingston said the space still presents some options. “It’s a very cool space,” Kingston said. He said a new tenant could reopen it as a new bar and restaurant, which only offered outdoor dining for the time being. But a new tenant could also just use part of the space as a ghost kitchen, which prepares food for to-go orders only. The bar area could be split off as a separate space. “We could definitely just convert the kitchen into a stand-alone space,” Kingston said.
This fall, that might change, when The Karmic Leaf will open in 1,625 square feet at 1131 K St. The location, facing 12th Street, was previously an Edible Arrangements location. In addition to every amalgamation and combination of teas imaginable, The Karmic Leaf will also have vegan food offerings such as salads and entrees with faux chicken, he said. “I want to create a space where people can come post-Covid, or post-pandemic, and feel safe,” he said. “They’ll know that they’re drinking something good and good for them.” Scott Kingston and Patrick Stelmach from Turton Commercial Real Estate brokered the lease for The Karmic Leaf on behalf of the landlord.
Like many businesses, there are practices and customs in commercial real estate that make the industry flow. With the Covid-19 pandemic, all those customs are at the moment either partially or wholly out the window. There’s not many business lunches happening when restaurants aren’t doing in-house service. Tours mean gatherings of strangers, a no-no when we’re supposed to be practicing social distancing and working from home. Brokers in the Sacramento area said they are in an adjustment period right now, still working to find new building tenants and owners, even as the economy sinks into a recession with pandemic shutdown orders. Another broker who heads a boutique commercial real estate brokerage in Midtown Sacramento said he expects more client meetings to become virtual as well. Videoconferencing apps such as Zoom and Microsoft Teams have become increasingly commonplace, said Ken Turton, of Turton Commercial Real Estate.
The R Street Corridor was still an emerging area of Sacramento when Dollar Tree opened at 1235 S St. nearly a decade ago, in 2011. Since then, the area has become one of Sacramento’s hottest redevelopment areas, but Dollar Tree (Nasdaq: DLTR) appears likely to remain, after its building sold this week for $2.25 million. Ken Turton, of Turton Commercial Real Estate, said the deal shows how neighborhood-serving stores still maintain an appeal during the COVID-19 pandemic. According to Turton, the sellers are investors who are looking to retire soon. In addition to Turton, Scott Kingston and Jon Lang of Turton Commercial helped broker the sale, which closed Tuesday.
Published on April 16, 2020
If the coronavirus’ effects on everyday life are a wave headed for the economy, so far it’s not washing up much on the shores of commercial real estate. Brokers and managers at three Sacramento brokerage offices said the effect is muted, though they said it’s also likely to change. But otherwise, brokers said, the fallout is harder to see. Ken Turton, of Turton Commercial Real Estate, said landlords of businesses tied to consumer spending, like restaurants, may start to notice tenant issues if people eat out less often to avoid potential COVID-19 infection. “We’re a service-based economy, and you have people no longer going to services,” he said.
One of Sacramento’s oldest school properties has a new owner. Originally known as Newton Booth School, the full-square-block property at 2600 V St. near Midtown Sacramento sold for $14.5 million in February, according to property records. Turton Commercial Real Estate brokered the sale, after the property was listed and then taken off the market in recent years. Brokers with Turton said they couldn’t discuss the transaction.